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New study shows immigration has a positive impact on government budgets, countering right-wing media claims that immigrants drain the economy

The Cato Institute found that over the course of 30 years, immigrants have added a net benefit of nearly $11 trillion to government budgets

Written by Zachary Pleat

Published

An updated study from the Cato Institute conclusively demonstrated that immigrants to the United States, no matter their legal status or skill level, have had a positive effect on government budgets at the local, state, and federal levels over the past 30 years. 

The study found that “for each year from 1994 to 2023, the US immigrant population generated more in taxes than they received in benefits from all levels of government” for a total of “nearly $10.6 trillion more in federal, state, and local taxes than they induced in total government spending.” The report also found that these tax receipts from immigrants “may have already prevented a fiscal crisis.”

Yet right-wing media have long claimed otherwise, saying that immigrants harm the economy and are a drain on government resources. These falsehoods have persisted into 2026 and have formed the basis for the Trump administration’s draconian — and increasingly unpopular — anti-immigration agenda.

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  • Cato Institute demonstrates that immigrants are “fiscally positive” to the U.S.

  • According to the Cato Institute's analysis of 30 years of local, state, and federal budgets, immigrants are net-contributors to the government’s bottom line. The analysis found that, contrary to the notion of immigrants as net-recipients of government spending, immigrants in the U.S. have contributed more in taxes than they received in benefits every year from 1994 through 2023.

  • Immigrants's fiscal surplus has grown even as deficits have exploded. Immigrants paid more in taxes than they received in benefits every year.

    Source: Cato Institute, "Immigrants’ Recent Effects on Government Budgets: 1994–2023," 2/3/26

  • Cato stated that “the single largest category of spending” is so-called “pure public goods,” such as national defense spending and payments on existing government debt, which are not measurably affected by net immigration at all. Cato noted: “Indeed, immigrants may even decrease these costs for the US-born by lowering interest rates and decreasing military recruitment costs. And they certainly ease the fiscal load on the US-born, because immigrant taxpayers help shoulder the fiscal burden of these expenditures.”

    The analysis also found “immigrants impose significantly lower costs associated with old-age benefits, education, and prisons” than their U.S.-born counterparts, while receiving a “close to average” amount of needs-based benefits and in other forms of spending on basic public services.

  • A graph showing immigrants costing less per capita than the average for Americans in various expenditure categories

    Source: Cato Institute, "Immigrants’ Recent Effects on Government Budgets: 1994–2023," 2/3/26

  • Cato's analysis found that immigrants as a whole are “fiscally positive” (they contribute more to government budgets via tax dollars than they receive in benefits) and that the same also applies to different classifications of immigrants; noncitizens, “low-skilled” immigrants, so-called “illegal” immigrants, and the children of immigrants all contribute more than they receive in the long term.

    • Cato: “Low-skilled immigrants paid $11.5 trillion in federal, state, and local taxes” and “received an overall $9.7 trillion in benefits, for a net-positive effect of $2.8 trillion after interest savings.” [Cato Institute, 2/3/25]
    • Cato: “Illegal noncitizens were only somewhat less fiscally positive per capita than noncitizens generally, and they likely reduced the deficit by at least $1.7 trillion from 1994 to 2023.” Cato further explained that “many illegal immigrants—employed under borrowed or stolen identities—have taxes withheld by employers and then are less likely to file returns to claim their refunds,” and “also directly or indirectly pay property taxes, corporate taxes, sales taxes, excise taxes, and many state fines and fees.” The study also explained that “illegal immigrants were generally ineligible for government benefits” with some exceptions. Cato concluded: “Even if illegal immigrants used benefits at the exact same rate as all noncitizens, they would still be, on average, fiscally beneficial to the United States—both by reducing the debt in real terms and by lowering debt-to-GDP.” [Cato Institute, 2/3/25]

  • Right-wing media suggest that immigrants harm the U.S. economy and government budgets

    • America First Policy Institute’s Carla Sands on Newsmax cited a Dutch study to claim that “immigrants coming from Africa … cost countries about $700,000 a year.” She added: “In fact, Somalians cost a host government over $1 million in their lifetime.” Sands’ comments were in response to a post by Trump’s State Department claiming that “mass migration has … threatened the economic security of American workers.” [Newsmax, The National Report, 1/1/26]
    • On Fox Business, Washington Examiner’s Tiana Lowe Doescher suggested undocumented immigrants were draining California’s budget. She said: “The state already spends between $20 and $30 billion per year just on illegal aliens, right, Medicaid for illegal aliens.” [Fox Business, Mornings with Maria, 1/2/26]
    • Fox guest Katie Zacharia: “Illegal immigrant health care” has “decimated our MediCal budget” in California. [Fox News, America’s Newsroom, 1/2/26]
    • Rep. Randy Fine (R-FL) on Newsmax: “The vast majority of Americans do not want illegal immigrants in our country sucking up our resources, making the rest of the country unaffordable for the rest of us.” [Newsmax, Wake Up America, 1/8/26]
    • Former Rep. Anthony D’Esposito (R-NY) on Newsmax: “The people who are being removed from Minnesota … are being deported for coming here illegally and utilizing all of our resources when they should be going to Americans.” [Newsmax, Wake Up America Weekend, 1/11/26]
    • Newsmax host Carl Higbie also cited a Dutch study to claim that non-Western immigrants aren’t productive. Higbie specifically stated that “northeast Africa, which just so happens to be where Somalia is … they are the least productive regional group of immigrants to Western countries.” [Newsmax, Carl Higbie Frontline, 1/16/26]
    • Fox Business guest Michael Murphy: “The economy … has more upside than people” realize because of Trump’s mass deportation agenda. Murphy said: “People believe — whether you love him or hate him — they believe in President Trump's U.S.-first agenda. Wages are going up. Getting 20 million, or a lot of illegal immigrants out of the country are providing more jobs. Mortgage rates are coming down. People believe in what we're doing. People believe in what's happening, and when they do, they talk with their pocketbook. They go to the store, they spend money.” [Fox Business, Varney & Co., 1/20/26]
    • Fox host Laura Ingraham: Virginia Democrats are “axing the state’s cooperation with ICE” and “want to guarantee illegal aliens free education. … This is going to send the state into an economic death spiral.” Ingraham noted that Virginia Democrats “also want to allow people to vote electronically through the internet,” and are “adding a bunch of new taxes, raising the minimum wage.” [Fox News, The Ingraham Angle, 1/20/26]
    • Fox Business host Dagen McDowell: Trump “knows that not allowing illegal migrants to just waltz into the United States … and become a burden to our society” is part of what he’s doing to “make us an even greater powerhouse.” [Fox Business, The Big Money Show, 1/21/26]
    • Fox guest Brittney Hopper: “There are so many of us on the right who don’t want millions of illegal immigrants coming into our country, straining our economy.” [Fox News, Fox News @ Night, 1/21/26]
    • Fox host Sean Hannity: California Gov. Gavin Newsom is “virtually bankrupting his state with multi-billion dollar boondoggles, billions and billions of handouts to illegal immigrants in his sanctuary state.” Hannity’s guest, Katie Miller, added that all Newsom has in California is “illegal aliens … that he’s giving free housing, free health care, causing a budget deficit,” and businesses are being taxed “to pay for illegal aliens.” [Fox News, Hannity, 1/22/26]
    • Hannity cited the nativist Federation for American Immigration Reform to claim that undocumented immigrants are costing California $31 billion annually in social services. [Fox News, Hannity, 1/23/26; Media Matters, 4/16/24]
    • On Fox’s The Ingraham Angle, Republican New York City councilwoman Vickie Paladino blamed the city’s budget deficit on “illegal migrants” that “have been coming into this city since 2023.” [Fox News, The Ingraham Angle, 1/28/26]
    • Fox host Rachel Campos-Duffy: “There’s going to be economic benefit for the working class” from “this illegal immigration crackdown of President Trump’s.” Campos-Duffy added: “The illegal immigrants undermine the wages, they bring down the wages of American citizens who work those jobs.” [Fox News, Fox & Friends Weekend, 1/31/26]
    • Newsmax guest T.W. Shannon: “We have sanctuary politicians who are standing with illegals over Americans. And the American people are sick of it. It’s a drain on our economy.” [Newsmax, Saturday Report, 1/31/26]
    • Sen. Roger Marshall (R-KS) on Fox Business: “From an economic standpoint, don't underestimate the impact of 10 or 20 million people flooding into our country, taking up the housing, as well as all the social resources as well.” [Fox Business, The Evening Edit, 2/3/26]
    • Newsmax guest Savannah Craven justified Trump’s mass deportation agenda: “You do not get to cut in line and then live in our country and take our resources, take our jobs.” [Newsmax, The National Report, 2/5/26]
    • Breitbart editor-in-chief Alex Marlow blamed immigrants for affordability problems. He said on Newsmax: “Basic economics dictates that when there's fewer people in the labor market, wages go up, and things like rent also are going to go down because there's less competition for rent. That's why we're seeing rent collapse, and we're seeing some solid wage growth across a lot of sectors in this economy. It all starts from Donald Trump's immigration policy.” [Newsmax, Carl Higbie Frontline, 2/5/26]

  • Right-wing media have pushed other economic falsehoods about immigrants in recent years

    • Right-wing media have falsely claimed that immigrants take American jobs. In fact, multiple reports and experts explained that immigrants compete with each other, not native-born Americans for jobs, and in fact, improve native-born workers’ job prospects. [Media Matters, 2/20/24]
    • Right-wing media falsely claimed that immigrants lower the wages of American workers. One study from the National Academies of Sciences, Engineering and Medicine found that immigration had “‘little to no negative effects on overall wages and employment of native-born workers in the longer term.’” A separate study from the University of Pennsylvania determined that “the economic effects of immigration are mostly positive for natives and for the overall economy” and that “studies find that immigration has actually raised average wages of native-born workers during the last few decades.” An Immigration Policy Center analysis found that “cities with greater immigration from Latin America” experience positive effects for Black workers, including higher wages and employment rates. [Media Matters, 3/1/17]
    • Right-wing media falsely claimed job creation under former President Joe Biden went to foreign-born workers and under Trump it’s gone to native-born workers. Economists rebutted this falsehood by showing that “the employment rate for native-born workers was higher under Biden than it is now,” and that the unemployment rate for native-born workers was higher in direct month-to-month comparisons every month in 2025 than it was in 2024 and 2023. Experts also explained that the population figures used by conservatives to make native-born vs. foreign-born employment comparisons are a statistical artifact and are both inaccurate for this kind of measurement and also contain warnings from government statistics agencies against using the numbers that way. [Media Matters, 6/10/24, 12/17/25]
    • Right-wing media misleadingly conflated lawfully present immigrants with undocumented immigrants to falsely claim the latter were getting health insurance through Medicaid and the Affordable Care Act. Right-wing media made this argument to falsely claim that Democrats “want to give health care to illegal aliens” during the 2025 government shutdown. [Media Matters, 10/14/25]